Even among those who immigrated to Canada through the federal government's immigrant investor program, the initiative was viewed as a flawed, inefficient way to lure wealthy entrepreneurs who could benefit the economy.

Many criticized the program as a way for rich foreigners essentially to buy citizenship and live abroad without creating jobs or economic growth in Canada. The plan, which was ended in Tuesday's budget, allowed foreigners with a net worth of more than $1.6-million to gain residency and potentially citizenship by lending the government $800,000 that would be paid back in about five years without interest.

The program was closed to new applicants in July, 2012, to clear a vast backlog. It will be replaced by two pilot projects: an immigrant investor venture capital fund and a business skills program. Tens of thousands of those who have applied to the program and are currently on the waiting list will have their fees refunded – but will not have their applications processed.

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For one businessman, who arrived here last month using the immigrant investor program, the eight-year process was a destabilizing time in which he, his family and his Chinese investment management firm were prohibited from making long-term plans involving Canada. He had applied so his daughter could go to university here, but she completed a postgraduate degree while they waited.

"The process of applying to immigrate to Canada has been a struggle for my family and my business," he said, asking to be identified only as Mr. Lu to keep his relatives and his company out of the public eye. "I think it is a good decision to cancel the program. It is so painful for applicants to wait for the result. Instead, Canada should have a more efficient program to attract investor-immigrants."

Many people say the decades-old program was a well-intentioned but flawed idea. To the more than 130,000 people who have used it since 1986, it has been a gateway to a more comfortable life in the West and a way to diversify investments out of riskier markets and offer greater opportunities for their children. And some say the program did bring a more transnational, globally minded investor to an economy that looks south to the United States.

But on Tuesday, the government said many of these investors have only tenuous ties to the country and pay "significantly lower taxes over a lifetime" than other immigrants. This echoes long-standing complaints about the program, which coincided with China's economic rise.

Within the Chinese business community in Vancouver, the program sometimes appeared to help wealthy mainland people gain Canadian citizenship, buy property and then move their family here, while living and doing most of their business in Asia.

A Chinese businessman who has worked in North America for years and has friends who came here under the program said the government should increase the threshold for investment.

The businessman, who asked not to be identified because he did not want his company's name made public, added that the government should "follow up on people to make sure they actually physically stay here. Many people just send their family here."

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Kenny Zhang, a senior fellow at the Asia-Pacific Foundation in Vancouver, said the program did have some impact on the the Canadian economy: directly, in consumption and taxes from buying houses, cars and other things; and indirectly, in helping create Asia-focused networks in Vancouver and other Canadian cities. Ryan Rosenberg, an immigration lawyer in Vancouver, said the city has become a sort of "bedroom community for the world," with many investor immigrants doing most of their income-earning and tax-paying in Asia – leaving their families here, with some qualifying for social services. "They would drive to their free ESL classes in their $80,000 Mercedes," Mr. Rosenberg said. But there are a variety of models. The federal government also operates the Canadian Experience Class, which fast-tracks residency for temporary foreign workers and applicants who graduate from Canadian universities and colleges.

The B.C. government partnered with a Vancouver-based organization to create a business immigrant integration support program that has brought about $5.2-million in investment over the past year. Advocates say it is closely monitored and designed to attract people who will "actively manage" a business here.

Queenie Choo, who heads SUCCESS, a group that helps Canadians of Chinese descent overcome cultural barriers, said the joint program with B.C. has much more stringent conditions than the immigrant investor program.

"The much more significant impact to the immigrant community here is to help the immigrant community to become entrepreneurs or to start their own businesses and become self-sufficient," Ms. Choo said.

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